Richard Spencer is one of the Daily Telegraph's Middle East correspondents. Married with three children, he was previously news editor, and then China correspondent for six years. He is based in Cairo.

Slightly grudgingly, Ed takes up the new vogue expression, the "squeezed middle", and avers that people on genuine middle incomes, as opposed to the six-figure salaries and more that many newspapers describe as "middle-class", can no longer afford the quality of life of their parents' and grandparents' generation:

A generation or two ago an average middle-class family in London could afford a house in a fairly decent area; now the most they can hope for is a three-bedroom ex-local-authority or two-bedroom ground floor of a former Victorian terrace. Runaway house prices have drastically reduced the quality of life and the major driver of this disguised inflation is the wages of the super-rich.

There are some caveats I would add. There are some ways we have much better lives than our parents – more fun, more freedom, more frequent and more exotic foreign holidays, better furniture, TVs, music systems and other gadgets, and so on, and those are all consequences of the wider economic and social forces of the neo-liberalism with which trickle-down is associated. But he's absolutely right that turning London and other major cities into playgrounds for the super-rich has had a detrimental effect on the rest of us.

(One example to show that it's more than house prices. When I lived in London, in a similar inner suburb to Ed's by the sound of it, it used to infuriate me, though it was inevitable, that the trunk road out of town near my neighbourhood would be blocked up for road works every weekend. All week, my kids going to school had to endure the endless rumble and fumes of roaring commuter traffic, whose interests were the focus of all transport policy, and then at weekends when I wanted to take them out to the country for a spot of much needed fresh air, it was impossible because of the roadwork-induced jams.)

As it happens, all this is one good reason why Dubai hasn't crashed as badly as was predicted last year, and why the expat exodus came to a halt. Many exceedingly well-paid journalists came here at the time of the financial crisis and simply couldn't work out why anyone would want to live here. What they missed was that, underneath the absurd bling, people who fell slap into that squeezed middle back home were precisely the people who found a niche here. By that, in common with the Polly Toynbee piece referred to by Ed, I mean those with jobs paying between say 20,000 and 60,000 a year, sums that are on the surface respectable but which even at the top couldn't get you a family home in the outer suburbs of a provincial city on a mortgage of three times salary. With international school fees often paid by employers, and no income tax, they could have a standard of living they couldn't back home and still save money (in many cases, for that UK property's downpayment).

There is another aspect of the story, which Ed doesn't cover, which is also of relevance here. In a comment, Ed correctly points out that immigration has been a contributory factor, but only a partial one, to house price rises. He makes this point partly because in the comments field he has come under fierce attack for betraying his vaunted conservatism with a neo-socialist attack on the free markets.

But the point is that here, as in so many issues nowadays, the right-left divide is breaking down. I have gone on before about how government intervention in housing policy is practised by governments seen as right-wing as well as left-wing. So I will confine myself to this point. Opposition to immigration is seen as a "right-wing" issue; but so is support for free-market, globalised economics. But that's actually a contradiction, and nowhere can this be seen more clearly than in London housing.

Making London welcoming for international business has been, of course, a key driver in arguments against increased taxes and other anti-City initiatives.

I'm not saying this is a good or bad thing. I do note, however, that other countries – including China and the Gulf states – are much more restrictive than we are when it comes both to property purchase and currency controls. Yet in many ways they are also much more conventionally "right wing". While they are less restrictive on immigration than we are, they are more restrictive on immigrants taking out citizenship and becoming permanent residents.

My final point is that under the current system the "squeezed middle" seem likely to suffer the consequences of making the city attractive to outsiders whatever the economy – a bit like my family suffering at both ends from the determination to make London accessible to commuters.
One reason why property didn't crash as the doomsayers predicted was that when the financial crisis happened, more money – like those Greeks – came into the market from outside. British property turned out to be like the dollar and gold – a safe haven. Papers in the Gulf and Hong Kong were suddenly full of adverts for investment property in the UK.

As I've always said, when asked why I kept my house in London, nobody builds Victorian houses any more – it's a real thing, like gold, not a bit of paper, like money or a share certificate. But unlike gold, prices also go up when the economy is singing, as economy-linked asset prices go up. So the locals find houses ever more unaffordable, whatever happens.

Peter Cooper, the Dubai journo behind Arabian Money, who often comments here, believes that the bubble has to burst, and quotes the famous line about how those who believe in the bubble say things are different this time but they never are. He may be right – but as he also points out, this particular bubble has been growing since the 70s, which neatly coincides with the globalisation from which globalised centres such as London have profited immensely. I suspect if things aren't different, it will be because of a sudden reversal in globalisation, sending Gulf Arabs, Chinese businessmen, and cash-rich corporations scurrying home. It's possible, but I don't see it yet.